Is your advisor scaring you into buying an annuity after saving for retirement? Here's where you should tell them to go
Is your advisor scaring you into buying an annuity after saving for retirement? Here's where you should tell them to go.
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"I would die and go to hell before I would sell an annuity," billionaire Ken Fisher said in a 2018 ad (1) for his investment firm, Fisher Investments. In an op-ed written for Forbes a few years earlier, he called the financial instruments "scumbag products." (2)
So if someone in a nice suit is scaring you into adding annuities to your retirement in 2026, should you send them in the same direction?
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Well, before you do that, it's worth understanding what annuities are designed for, why they get such a bad rap and whether they're a good fit for your personal finances.
Annuities are designed to offload risk for anxious investors.
At a basic level, these are contracts that investors sign with insurance companies to lock in regular income payments in retirement, according to US Bank (3). And that market has grown rapidly.
In 2025, annuity sales totaled $460 billion — nearly double the 2020 total and marking the fourth consecutive record-breaking year, according to LIMRA (4) and Plan Advisor (5). Much of this growth seems to be driven by the need for peace of mind.
A whopping 97% of annuity owners said they worry less about running out of money in retirement, while 88% said it has eased concerns about a stock market downturn, according to Bloomberg (6).
However, the downsides of these products are often overlooked.
According to Fisher Investments, annuities could have excessively high fees, restrictive lock-up terms, high surrender charges and misleading interpretations of "guaranteed returns."
"Annuity providers often reward their salespeople with large commissions that are built into the policy," says the Fisher report.
Simply put, annuities could be useful for some people, but you need to be vigilant to make sure they're the right fit for you. This is especially true if your savings exceed $2 million.
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If you're relatively affluent or a multimillionaire, annuities may not be an appropriate fit.
You probably don't need to lock up assets or expose yourself to surrender fees when you're less likely to run out of money in retirement.
